Summer Training ReportOn

“COMPETITIVE ANALYSIS

OF

SHAREKHAN WITH OTHER MAJOR

PLAYERS IN SECURITY MARKET”

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF DEGREE OF

MASTER OF BUSINESS ADMINISTRATION (MBA)To

MAHARSHI DAYANAND UNIVERSITY, ROHTAK

Submitted by:-

Name: Pawan Kumar Institute Roll No. 2527Semester: MBA (3rd Sem)

AMITY BUSINESS SCHOOL, MANESAR

AUGUST, 2006SESSION – 2005-07

1

DECLARATION

I, Pawan Kumar, Roll No. 2527, M.B.A (3rd Sem) of the Amity Business

School, Manesar hereby declare that the Summer Training Report entitled

“Competitive Analysis of Sharekhan with other major players in Security

Market” is an original work and the same has not been submitted to any other

institute for the award of any other degree.

A seminar presentation of the Training Report was made on 9th August and the

suggestions as approved by the faculty were duly incorporated.

Presentation In-charge Signature of the candidate

Signature:

Faculty: Mr. Ashish Manchanda

Countersigned

Director of the Institute

2

ACKNOWLEDGEMENT

The project report entitled, “Competitive Analysis of Sharekhan Securities

with other Major Competitors” demanded a lot of research and a proper

methodology to be followed. For that matter I needed a proper guidance and

support to be able to come up with true picture of the market.

I, hereby, express a sincere and deep gratitude to Dr. R. C. Sharma, Professor &

Adviser, Amity Business School, Manesar who has always acted as a guiding

force in all my problems and without whose kind support guidance I would not

have been able to do full justice to this project.

I would also like to extend my gratitude to Mr. Manash Pratim, (Territory

Manager) without his help it would have been impossible for me to carry out the

project successfully.

I would also like to extend my thanks to Mr. Bhupender Arya (Assistant

Manager) who has given me every support as an industry guide for my project as

well as the practical experience of the market.

Finally I would extend my gratitude to my faculty guide Mr. Ashish Manchanda

who has provided me guidance and support at each and every step.

Pawan Kumar

3

PERFACE

Emerging Stock Markets recently has been of great importance to the worldwide

investment community. The fate of the economy of a country is intertwined with

the performance of its stock markets. This is especially true for the emerging

economies and their stock markets. The development process undergone by these

emerging economies as clearly demonstrated that today’s investors are unlikely to

invest in what appear to be a profitable company if the economic fundamental of

the country are in question.

India is considered as one of the fastest emerging markets in the world. It has a

well established stock market with a long history of organized trading in

securities. It has 24 stock exchanges spread across the country and has a total

population of more than 45 million. After the Liberalization policy of the

government in 1991 a number of measures were initiated which have had a direct

or indirect impact on the growth of the stock market.

Now a day there are various broking houses in India who helps the investors to

invest in capital market easily.

In the light of above, the present study has been conducted to make the

competitive analysis of various major players of broking houses. The whole study

has been divided into 7 chapters.

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The 1st chapter deals with the introduction about the project like company profile,

objective of the study, limitations, focus of the problem and signification of the

study.

The 2nd chapter deals with the industry profile. It reveals the idea of the whole

industry that how it works and what it includes.

The 3rd chapter deals with the company profile in which it has been contained the

various services as well as the areas and company management with organization

structure.

The 4th chapter deals with the Research methodology; in it we covers research

design, universe and survey population, sample design, collection of data, etc.

The 5th chapter deals with the analysis and interpretation part. This is the crucial

part which tells the study results and the various information about the research.

The 6th chapter deals with conclusions of the study and gives the suggestions to

improve or solve the present problems.

The 7th chapter deals in the annexure which comprises the bibliography and the

questionnaires. It tells the path from where the material has been collected.

5

Table of Contents

Page No.Declaration I

Acknowledgement II

Preface III-IV

Chapter 1-Introduction of the Study 1-5

Introduction to the project 1

Significance of the study 2

Focus of the problem 3

Objectives of the study 4

Limitations of the study 5

Chapter 2- Industry Profile 6-12

Industry Profile 6

Depository (NSDL & CDSL) 7-9

Market Intermediaries 10

BSE Stock Market 11-12

Companies listed in BSE 13

Chapter 3-Company Profile 14-32

Introduction 14-15

Vision & Mission 16

Company group and Structure 17

Highly Rated Research 18

Network of Sharekhan 19

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Management Team 20

Services offered by Sharekhan 21

Different Areas of Trading 22-23

Trading Procedure 24-32

Chapter 4- Research Methodology 33-38

Introduction 33

Research Design 34-35

Universe and Survey population 36

Data Collection 37-38

Chapter 5- Analysis and Interpretations 39-54

Company’s Background 39-43

Comparison of Depository Participant 44-54

Chapter 6-Conclusions 55-60

Findings 55-56

Recommendations 57-58

Chapter 7- Annexure 59-63

Bibliography 59

Questionnaire 60-63

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INTRODUCTION TO THE PROJECT

This project is a very good task for the analyze of the company’s market share

and the satisfaction level of the customers of various companies. Sharekhan

8

Securities Pvt. Ltd. Is a brand name in the field of securities. The major other

players in this field are Indiabulls, ICICI Direct. Com, Karvy, India Infoline, etc.

This project includes the various services provided by the company like research

mails, online trading, online terminal, etc. In my project I have covered the

various functions of the company mainly taking into consideration the share

broking. The comparison of various companies will help in the study to make a

clear cut idea of the market demand of the company as well as this will provide

the base to improve the strategies to make the company more competitive.

In the project I have also analyzed the customer perception about the various

services offered by the company and the market scenario. It will help in

comparison of the companies from the point of view of the customers. There is a

need of this study because customers have the veto power to accept or reject a

product or a service.

SINIFICATION OF THE STUDY

9

The study of comparing the services offered by the company and the market share

will be helpful for the company in making future decisions to increase its market

share as well as its client satisfaction level.

This study will be helpful for the company in this respect also that what are the

strategies used by other major competitors and at what extent they get success.

This study also helps the students who want to study the share market and various

broking houses. It is helpful for customers also because by reading it carefully it

they can choose a good broking house which can fulfill their needs.

FOCUS OF THE PROBLEM

10

Every research work is based on some problems. If there is not a problem then

there is no need for a research. So to make a research 1st of all make the problem

clearly defined and then we can start any study. For this very study I have made

the focus on Equities. It is the 1st step for a person who wants to enter in the share

market. In it I have taken the services offered by various companies as well as

their brokerage and other charges.

OBJECTIVES OF THE STUDY

11

Setting objective is very important for any research or a project. The project is

decided to compare the services offered by various broking houses with taking

consideration of client satisfaction.

To obtain this main objective, I have divided it into sub objectives .These are as:

1. The 1st objective is to find out the various services offered by the

company.

2. To get knowledge about the market share of the company.

3. To get familiar with the services offered by other major players in

securities.

4. To check the satisfaction level of the people.

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LIMITATIONS

In making any research work a researcher has to face many problems which fix

the boundary of any research. So a researcher has to make his study carefully to

obtain good and fruitful results. In my project also I have to face many limitations

which are as:

1. The data was collected from various sources which are not

equally reliable

2. To collect data I have to visit so many places

3. People were not cooperative in providing data

4. The market was taking high fluctuations at that time

5. Many other companies are also entering in the market which up

to some extent affected the study

13

INDUSTRY PROFILE

SEBI has regulated the whole capital market in which investor’s trade. All the

transactions are controlled and executed by the SEBI. It has established 2

14

depositories named NSDL and CDSL. These now make the transactions in

various stock exchanges like Bombay stock exchange, National stock exchange

and various other Regional stock exchanges. These 2 depositories directly don’t

interact with the clients. Clients and the depository have at least 1 intermediate

depository participant who makes all these transactions possible and generate the

brokerage.

The depository participant opens the Demat a/c and provides base to the clients to

do trade and give them guidelines also. NSE and BSE are the 2 major stock

exchanges which have established their index named by NIFTY and SENSEX,

which shows the market’s position of 50 and 30 big companies respectively. BSE

is the oldest stock exchange in India and the SENSEX of the last financial year

was more volatile than previous years. But the value of shares in the BSE is going

up .the trend of it is increasing. For this vary reason more and more investors

from domestic country and FII’s are trading in it.

SEBI has regulated all the transactions and make it compulsory to have the PAN

card for operating the share trading. It also has made the transactions easier by

providing the facility of dematerialization of shares. Earlier the shares were in

physical form but now they are in electronic form and it takes less than 1 minute

to execute an order.

DEPOSITORY

15

The depositories are important intermediaries in the securities market that makes

the scrip-less trading. In India, the Depositories Act defines a depository as:

"A company formed and registered under the Companies Act, 1956 and

which has been granted a certificate of registration under sub-section (IA) of

section 12 of the Securities and Exchange Board of India Act, 1992."

Dematerialization of securities occurs when securities, issued in physical form,

are destroyed and an equivalent number of securities are credited into the

beneficiary owner's account. In a depository system, the investors stand to gain by

way of lower costs and lower risks of theft or forgery, etc. They also benefit in

terms of efficiency of the process. But the implementation of the system has to be

secure and well governed.

A depository established under the Depositories Act can provide any service

connected with recording of allotment of securities or transfer of ownership of

securities in the record of a depository. A depository cannot directly open

accounts and provide services to clients. Any person willing to avail of the

services of the depository can do so by entering into an agreement with the

depository through any of its Depository Participants. 

Type of Depository

1. NSDL2. CDSL 

 

 NSDL

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Although India had a vibrant capital market, which is more than a century old, the

paper-based settlement of trades caused substantial problems like bad delivery

and delayed transfer of title till recently. The enactment of Depositories Act in

August 1996 paved the way for establishment of NSDL, the first depository in

India.

The depository promoted by institutions of national stature responsible for

economic development of the country has since established a national

infrastructure of international standard that handles most of the trading and

settlement in dematerialized form in Indian capital market.

Using innovative and flexible technology systems, NSDL works to support the

investors and brokers in the capital market of the country. In the depository

system, securities are held in depository accounts, which is more or less similar to

holding funds in bank accounts.

 

 

 

 

 

CDSL

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Central depository of stock limited is also a depository for keeping record of the

clients. This is helpful in reducing the time spend and the money for transaction.

It has eliminated the paper work completely and keeps the record of shares and

other transactions in electronic form.

The main reason of Indian capital market growth is the depository establishment.

FII’s are also taking benefit from it. It has increased the safety as well as the

soundness in the transactions. CDSL works with the help of depository participant

like Indiabulls which is an intermediate between investors and the depository.

Transfer of ownership of securities is done through simple account transfers.

Consequently, the cost of transacting in a depository environment is considerably

lower as compared to transacting in certificates.

 

 

MARKET INTERMEDIARIES

18

 

 There are several institutions, which facilitate the smooth functioning of the

securities market. They enable the issuers of securities to interact with the

investors in the primary as well as the secondary arena. These intermediaries are

very important for any company because all the money is not provided by the

customers at the time of applying of IPO’s. So a company uses the benefits of

these intermediaries to fulfill their daily needs and for the growth of the company.

The various intermediaries are as follow:

MERCHANT BANKERS

CREDIT RATING AGENCIES

STOCK BROKERS

CUSTODIANS

MUTUAL FUND

DEPOSITORY PARTICIPANTS

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BSE STOCK MARKET(Apl 2005- Mar 2006)

0

2000

4000

6000

8000

10000

12000

5-Apr 5-May 5-Jun 5-Jul 5-Aug 5-Sep 5-Oct 5-Nov 5-Dec 6-Jan 6-Feb 6-Mar

HIGH

LOW

CLOSE

Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich

heritage. Popularly known as “BSE”, it was established as “The Native Share &

Stock Brokers Association” in 1875. It is the first stock exchange in the country to

obtain permanent recognition in 1956 from the Government of India under the

Securities Contracts (Regulation) Act, 1956.The Exchange’s pivotal and pre-

eminent role in the development of the Indian capital market is widely recognized

and its index, SENSEX, is tracked worldwide.

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The trend of sensex in the financial year 2005-2006 has increased in a great

extent. It reached the point of 6606.41 high and 6134.86 at low in the month of

April 2005. In March 2006 it reached the point high and low at 11307.04 and

10508.85 resp. this shows its volatility. Sensex closed at the end of period at the

point 11279.96 with a rising trend. This increasing trend of the market also

affected the mind set of the customers. Earlier they were thinking about the share

market as an uncertainty but now it is considered as a calculated risk.

COMPANIES LISTED IN BSE SENSEX

Company Code Company Name

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500410 Associated Cement Companies

500490 Bajaj Auto Ltd.

500103 Bharat Heavy Electricals Ltd.

532454 Bharti Airtels

500087 Cipla Ltd.

500124 Dr Reddy’s Laboratories Ltd.

500300 Grasim Industries Ltd.

500425 Gujarat Ambuja Cements Ltd.

500010 HDFC

500180 HDFC Bank Ltd.

500182 Hero Honda Motors Ltd.

500440 Hindalco Industries Ltd.

500696 Hindustan Lever Ltd.

532174 ICICI Bank Ltd.

500209 Infosys Technologies Ltd.

500875 ITC Ltd.

500510 Larsen & Toubro Ltd.

532500 Maruti Udyog Ltd.

532555 National Thermal Power Corporation Ltd.

500312 ONGC Ltd.

500359 Ranbaxy Laboratories Ltd.

532712 Reliance Communications

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500390 Reliance Energy Ltd.

500325 Reliance Industries Ltd.

500376 Satyam Computer Services Ltd.

500112 State Bank of India

532540 Tata Consultancy Services Ltd.

500570 Tata Motors Ltd.

500470 Tata Steel Ltd.

507685 Wipro Ltd.

The companies listed in BSE sensex are 30 which show the trend of the market.

On 12-06-2006 TATA POWERS LTD. Was removed from the list and a new one

is added named RELIANCE COMMUNICATION VENTURES LTD.

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INTRODUCTION

Sharekhan is the retail broking arm of S S Kantilal Ishwarlal securities pvt.

Ltd. It is India’s leading retail financial Services provider Company. It is in the

Indian securities business since 1927. Its institutional Research team is rated as

one of the best in the industry and rated 1st by Asia Money .Its research team

covers more than 100 stocks spread over 20 sectors.

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The company has over 331 share shops across 117 cities excluding franchisees

in India. While our size and strong balance sheet allow us to provide you with

varied products and services at very attractive prices, our over 750 Client

Relationship Managers are dedicated to serving your unique needs.

Sharekhan is lead by a highly regarded management team that has invested crores

of rupees into a world class Infrastructure that provides our clients with real-time

service & 24/7 access to all information and products.

Our Sharekhan Professional Network offers real-time prices, detailed data and

news, intelligent analytics, and electronic trading capabilities, right at your

fingertips. This powerful technology complemented by our knowledgeable and

customer focused Relationship Managers.

It creates a world of Smart Investor. Sharekhan offers a full range of financial

services and products ranging from Equities to Derivatives which

enhance our wealth. Relationship Managers are available to help with financial

planning and investment needs. To provide the highest possible quality of service,

Sharekhan provides full access to all our products and services through multi-

channels. 

In starting it was only a research house but now it has got increased its area and

deals in every field of trading like shares, commodity, mutual fund, PMS, etc.The

25

main aim of the company is to provide quality services at the least cost.

Sharekhan security has established now a brand name which provides the clients

useful and timely information about the future at their home. The vision and

mission of the company proves all these facts clearly and very soon it will achieve

its mission.

 

VISION

The vision of any company plays a key role for the success in the long term. It is

decided by the key persons at the beginning of the organization. The vision of

Sharekhan is to be the best retail broking brand in the Indian Equity market. 

26

MISSION

The vision is decided by the company for the long run but it is not possible for

any organization to fulfill its vision which is decided in the beginning. For the

very reason it divides its vision into small period Missions. So a mission is a short

term target where a company wants to reach. The mission of Sharekhan is to

educate and empower the individual investors to make better investment decisions

through quality advice and superior service which leads the growth of the

organization. 

SSKI GROUP COMPANIES

SSKI Investor Services Ltd (Share khan)

S.S. Kantilal Ishwarlal Securities

SSKI Corporate Finance

Idream Productions

27

SSKI – CORPORARE STRUCTURE

HIGHLY RATED RESEARCH

Research team ranks very high in fund-manager surveys. At the time of

establishment of S.S.Kantilal Ishwarlal Securities Pvt. Ltd. It was only a research

house. After this it extended its area and came into the share trading. Many

surveys tell the story of the growth of the company like:

Best Domestic Securities House

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Euromoney Survey July 1995

Euromoney Survey July 1996

Top ranked Domestic Brokerage House

Asiamoney Survey September 1994

Asiamoney Survey September 1995

Asiamoney Survey September 1996

Asiamoney Survey October 1998

Asiamoney Survey October 2004

NETWORK OF SHAREKHAN

29

From sharekhan.com to

India’s largest chain of branded retail share

Shops

331 branded share shops across 117

cities in India

The network of the Sharekhan Securities is very wide. It has emerged as a back

bone for the whole country. The area of its network is 331 share shops in 117

cities of the country excluding franchisee. It has the largest chain of share shops

with a brand name of Sharekhan which serves more than 100,000 clients.

MANAGEMENT TEAM

30

Excluding these key persons there are other persons like:

Regional sales manager Mr. Amar Pal Singh

Branch Manager Mr. Manoj Sharma

Territory Manager Mr. Manash Pratim

Various others Research Managers and Sales persons are working there

permanently.

SERVICES OFFERED BY SHAREKHAN

31

In the field of securities the brand name Sharekhan provides various services to

the investors which help them to get more and more return with less amount of

money. For this very purpose it provides research mails, online trading facility,

online money transfer and makes training and seminars on frequent bases which

makes the investors self dependent.

DIFFERENT AREAS OF TRADING

32

Training and Seminars

Investment and Trading Services

EQUITIES

DERIVATIVES

COMMODITIES

PMS

Research Based

Investment

Integrated Demat Facility

Technology Based Investment Tools

Equity

Sharekhan provides the services in equity trading. For this it opens the Demat a/c

with trading a/c, which provide the investors a base from there they can make the

share trading. Sharekhan deals in NSE and BSE both which gives the investors

more choices. To help new investors it also provides the research mails.

Derivatives

Sharekhan deals in derivatives also in which an investor can play with future and

option. This is a more advanced feature in trading but there is a need of full

knowledge. Without the proper knowledge it may be harmful for the investor.

Mutual Fund

Sharekhan deals in Mutual Funds, the funds of small investors are collected and

then the total amount is invested by the company in some beneficial shares. Small

investors can’t get benefit individually from their small investment but the

company can provide them more return by making a collective amount of the

various investors.

33

Initial Public Offer

Sharekhan also deals in Initial Public Offers. These are the first offering to the

public of a company's shares on the stock market. Earlier it was very difficult task

to apply for an IPO but now it is as easy as the purchase of a share. All the

information relating to the IPO is provided by the company online to its

customers.

Commodity

Sharekhan deals in commodity also which is a booming sector now a day. It is

right that the commodity market is not so popular but the investment is going

quickly increasing. To invest in commodity it opens the a/c and also gives

research mails.

Portfolio Management

Sharekhan also provide the services of portfolio management service which is

managed by the company itself and the investor has to do nothing. All the

decisions are taken by the company to buy or sell the shares taking into

consideration the market scenario. This facility is provided by the company to the

big investors who can invest more than 5 lakhs.

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TRADING PROCEDURE

To make the trading in the stock market we have to fulfill some formalities

according to the SEBI. These formalities includes the account opening form,

verification of the documents, PAN card compulsory, address proof, etc. After we

can make the trade in he shares and commodities.

Account Opening Form

Any investor who wishes to avail depository services must first open an account

with a depository participant of NSDL or CDSL. The process of opening a demat

account is very similar to a bank account.

The investor can open an account with any depository participant. There are

several DPs offering various depository-related services. Each DP is free to fix its

own fee structure. Investors have the freedom to choose a DP based on criteria

like convenience, comfort, service levels, safety, reputation and charges. After

exercising this choice, the investor has to enter into an agreement with the DP.

The form and contents of this agreement are specified by the business rules of

NSDL and CDSL. When the account is opened an investor can buy or sell the

shares. The record is kept by the depository. The depository participant charges its

brokerage for providing the various services like research mails, portfolio

management services, online facility, etc. the charges of brokerage is cut down

automatically by the DP so that any fraud does not exist.

35

If an investor wants to change his account, he can do it and can apply for the other

one. For closing the account he has to give an application in the office and the

charges of transferring the shares is deducted only, which are very less.

Document for Verification

For the purpose of verification, all investors have to submit the following

documents along with the prescribed account opening form:

PAN Card

PAN card is mandatory after the date of 31st may, so any person who wants to

open an account has to get first of all his PAN card. After getting this he can

apply for the D-MAT account. It has reduced the fraud cases also.

Proof of Address 

The account opening form should be supported with proof of address also.

Without this the application is not accepted. The documents for the verification

may be any one of them such as:

Verified copy of ration card

Passport

Voter ID card

Driving license

Telephone bill

Bank statement

Rent agreement

Electricity bill

.

Common Information

36

The processes of opening an account with a depository (NSDL /CDSL), nature of

such an account, and other various factors for opening a depository account are

essential. Some details are common to all types of accounts. These are:

Name of the holder

Father’s name

Date of birth (for individual accounts)

Occupation

Address & phone/fax number

E-mail address

Verified photo

Bank details like name of bank, saving account, account number, branch

address, etc.

PAN number

Details of nomination (if required)

Verified signature 

37

Closure of Client’s A/C

A DP can close a depository account on receipt of an application in the prescribed

format. The application should be made by the account holder or by all the joint-

holders. An account can be closed only when there is no balance in the account.

In case there is any balance in the account sought to be closed, the following steps

are necessary.

(a) Re-materialization of all securities standing to the credit of the account at the

time of making the application for closure; or

(b) Transferring the balance to the credit of another account opened by the same

account holder(s) either with the same participant or with a different participant.

Before closing the account the DP should ensure that all pending transactions

have been settled. The request for closure should be processed only after ensuring

that there is unbalance lying in the account.

The DP may also initiate closure of a client's account if the client has defaulted in

performing its obligations laid out in the client-participant agreement. The

participant should give sufficient notice to the client before initiating closure of

his account. The notice should clearly state the reasons for closure of account.

The process of closing account in such a case is the same that of client-initiated

closure.

38

Shifting of the A/C

A member may transfer its clearing account from one DP to another DP. For this,

simultaneously applications have to be made for closure of account to the earlier

DP and for opening of new clearing member account to the new DP. On receipt of

the application, the new DP forwards the application to the depository for

approval and allotment of a new A/C. Once the new A/C is allotted, the new DP

opens a new clearing account and intimates the depository about the new client-

ID. On receipt of intimation from the new participant, the depository advises the

old DP to close the account. The old DP then closes the account and intimates the

clearing member. All pay-out of securities, subsequent to closure of old clearing

account, take place in the new account.

39

Freezing of Account

Account freezing means suspending any further transaction from a depository

account till the account is de-frozen. A depository account maintained with a DP

may be frozen in certain cases.

1. If a written instruction is received from the client by the DP, requesting

freezing of account; or

2. If written instructions are received from the depository pursuant to an order of

the Central or State Government, SEBI, or any order by the court, tribunal, or any

statutory authority. An account may be frozen only for debits (preventing transfer

of securities out of the account). By freezing an account for debits only, no

securities can be debited from the account; however, the client can receive

securities in his account. An account can also be freezed for debits as well as

credits (preventing any movement of balances out of the account). No transaction

can take place in such an account until it is reactivated.

A frozen account may be de-frozen or re-activated, by taking the reverse steps:

1. On the valid written request of the account holder where he had requested

freezing,

2. On directions of depository made in pursuance of the order of the appropriate

authority. The DP should immediately inform the client about change in status of

the account from 'active' to 'suspended' and vice versa.

40

Changes in Client Details

A client may change any of the following particulars in the depository system. All

he has to do is to submit the changes in writing to the DP.

1. Father's/Husband's Name (change from father's name to husband's name

may be necessary on account of marriage).

2. Standing instruction facility (an investor can activate/deactivate it)

3. Address, telephone number (clients may make this change at any time

depending on their need). Clients have to provide proof of new address

while submitting application for change of address.

4. Occupation details

1. 5: Nominee details (the DP has to obtain the required form from the client

duly filled and effect the changes)

5. Bank details (clients may revise the bank details given by him before

record date to ensure that the dividend/interest warrants bear the correct

bank details)

6. PAN Number details

7. In case of NRIs, the Reserve Bank of India Reference number and

approval date. However, the names of the account holders cannot be

changed after opening of demat account.

41

Trading Process

After opening the demat a/c an investor can trade in the securities and

commodities. He has to 1st of all transfer money in his a/c for purchase of shares

and then he can buy the shares at the market rate. He has no need to go anywhere

because all the information is provided to him on the interne which can be easily

accessible from anywhere in the country. He has been provided an online terminal

which shows the per second up and downs of the market. In addition he has been

given the research mails which guide him to invest in he particular shares for

more and more profit. On these bases he chooses the best suitable securities and

uses in equity or derivative. Share trading can be in equity or in derivative form.

In equity an investor deals in the current prize or he can make a bid. In derivatives

he can choose the options of share prize of the future. He can also have the option

of nullifying the contract in future if he thinks that it is not beneficial for him.

The various types of derivatives are as:

Derivative

Definition under SEBI Act:

The term “Derivatives” indicates that it has no independent value, i.e. its value is

entirely “derived” from the value of the underlying asset. The underlying asset

can be securities, commodities, bullion, currency, live stock or anything else. In

other words, derivative means a forward, future, option or any other hybrid

contract of pre determined fixed duration, linked for the purpose of contract

42

fulfillment to the value of a specified real or financial asset or to an index of

securities.

Types of Derivatives

Derivatives are very important for the investor. An investor can get benefits by

investing through derivatives. It gives an investor more options to invest like

future contracts, etc. various type of derivatives are as:

Forwards

A forward contract is customized contract between two entities, where settlement

takes place on a specific date in the future at today’s pre-agreed price.

Futures

A future contract is an agreement between two parties to buy or sell an asset at a

certain time in the future at a certain price. Future contracts are special types of

forward contract in the sense that the former are standardized exchange-traded

contracts.

Options

Options are of two types- calls and puts. Calls give the buyer the right but not the

obligation to buy a given quantity of an underlying asset, at a given price on or

before a given future date. Puts gives the buyer the right, but not the obligation to

sell a given quantity of the underlying asset at a given price on or before a given

date.

Swaps

Swaps are private agreements between two parties to exchange cash flows in the

future according to a pre arranged formula. They can be regarded as portfolios of

forward contracts.

43

44

INTRODUCTION

ResearchIn common words research is known as a search for knowledge. Research is also

known as a movement, a movement from the known to the unknown. It is actually

a voyage of discovery. To make any project or study work there is a need of

research. Without this any work can’t be completed.

According to Advanced Learner’s Dictionary,” It is a careful investigation or

enquiry especially through search for new facts in any branch of knowledge.”

According to Redman and Mory,” It is a systematized effort to gain new

knowledge.”

Research Process

The process of a research work goes through different stages. By going through

these stages one by one a work becomes very easy and attractive. These stages are

as followed

uuuuuk

45

Analysis of data

Formulation of problem

Literature survey

Develop hypotheses

Prepare research design

Determine sample design

Collection of data

Interpretation of data

RESEARCH DESIGN

It is the arrangement of conditions for collection and analysis of data in a manner

that aims to combine relevance to the research purpose with economy in

procedure. In fact, research design is the conceptual structure within which

research is conducted.

Types of Research Design

Exploratory

The main aim of this research is to formulate the problem in the more precise

manner. The major emphasis is on the collection of related data and insights more

and more. In it the researcher review and build upon the work, which is already

done by others.

Descriptive and Diagnostic

These are the studies, which are related with describing the characteristics of a

particular individual, or of a group. In Diagnostic research studies determine the

frequency with which something occurs. In these research works it must be

clearly defined that what to measure and how to measure with predefined

‘population’.

Experimental

In this research work the hypothesis of casual relationship between variables are

tested. It makes the study more reliable and unbiased. It is sure that it will require

more hard and mentally work but it also provides good and extraordinary results

many a times.

46

In my project work I have used the Analytical

research. In the project I want to make the critical evaluation of the Sharekhan

Security. For these I have used the primary as well as secondary data. By using

the data and making comparison with other companies I would find out the

market share as well as the growth and services of Sharekhan Security. I have also

analyzed critically the services offered by the various companies and what the

customer demands.

47

UNIVERSE AND SURVEY POPULATION

Universe

All items in any field of inquiry constitute a universe or population. A complete

enumeration of all items in the total population is known as census inquiry. It can

be presumed that in search an inquiry when all items are covered, no element of

chance is left and highest accuracy is obtained. But when the field of inquiry is

large, this method becomes difficult to adopt because of the resources involved. In

this position this method is practically beyond the reach of ordinary researcher. In

this case we use the survey population method in which we use the randomly

selected items who represents the whole population.

In my research study I have not used the total population because there are

hundreds of depository participants and to analyze them is not so easy. So I have

used the survey method.

Sample Design

Sample Design is an effective technique for obtaining a sample from a given

population. It refers the procedure a researcher uses for analyzing the whole big

population. Sample design is determined before data are collected. For the study I

have used the sample survey method in which I have used the 6 major competitors

in securities.

To analyze the satisfaction level of the customers I have also used this technique

in which my sample size is 50 customers of different depository participants.

These are chosen randomly from various places in Gurgaon.

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DATA COLLECTION

To make any research work collection of reliable and valid data is very important.

Without data any research comparison is not possible. There are 2 types of data,

which can be used for the study. These are

1 Primary

2 Secondary

A researcher who is conducting a survey or comparison has to decide in advance

that what short of data he is using for his study. These data can be collected by

various sources but the need is that there should be authenticity of the data

otherwise it will provide a meaning less and funny result.

Primary Data

These are the data, which are collected afresh and for the 1st time. This type of

data is not available earlier so have to collect by the researcher himself/herself.

These are original in character and collected by various sources like:

1. Questionnaire

2. Interview

3. Schedule

4. Expert opinion

49

Secondary Data

These are the data, which have already been collected by someone else, and they

have been used for the different study. This type of data can be taken from various

sources according to the researcher’s choice and motive. The main issue is that

validity and authenticity of the data is in a big question so the data should be used

carefully for the better result. The various sources of secondary data collection are

as follows:

1. Books, magazine and newspapers

2. Various publications

3. Researcher’s report

4. Historical documents

5. Various published journals

6. Diaries and letters

7. Unpublished biographies, etc

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COMPANY’S BACKGROUND

5 PAISA.COM

51

5 Paisa.Com is also known as India Infoline and was founded in 1995 and

positioned as a research firm in 2000. E-broking was started under the brand name

of 5 Paisa.com. Apart from offering online trading in stock market the company

offers mutual funds online.  It also acts as a distributor of various financial

services i.e. GOI securities, Company Fixed Deposits, Insurance.  Limited ground

network, present in 20 Cities. It deals in shares, commodities, and derivatives also

of NSE and BSE both. It has established as a major player in the market in a very

short period. The company targets only the potencial customers and provides

them more and more facility at the least cost. The motto of the company is to

become a country wide organization with target customers. It has increased its

client base from last 1 year in a rapid growth rate. Company is now in the major

competitors in the industry and no research work is completed without it. To

make the comparison with other companies we will consider all the services it

provides to the customers and in response what it charges from them.

INDIABULLS 

Indiabulls is a retail financial service provider company present in 70 locations

Covering 62 cities and having more than 150 branches in India.. It offers a full

52

range of financial services and Products ranging from Equities to Insurance. More

than 450 Relationship Managers who act as personal financial advisors to the

clients. Indiabulls is a brand name in the DP. It gives online and offline services

to its customers. The cliental area of the company is very wide and it is listed with

the CDSL depository. The clients of Indiabulls are very selective and really work

in the share market whole heartedly. Company provides them more and more

facilities but its cost is some high. This company has established its standards in

the market and having a good brand image. The people in the share market are

very familiar with it. Company provides research mails and online terminals also

to its clients. The a/c opened by it is pooled a/c and it is enlisted in CDSL. It s a

major market player in the industry and it was very necessary to focus on it.  

 

ICICI DIRECT.COM

ICICI Web Trade Limited (IWTL) maintains ICICI direct.com. IWTL is an

Affiliate of ICICI Bank Limited and the Website is owned by ICICI Bank

Limited. The Direct.Com started in the year of 1998. It has increased very fast

53

because it provides saving account with the D-mat account. Actually it provides a

3 in 1 account which are D-mat, trading and saving a/c. it is also a major

competitor in share market. It provides online money transfer and the online

trading. The company is in the market by its brand name. the name of ICICI is

very famous in the Indian market and the company spends a much more portion

of their profit in the advertising. The reason of being in the major players in the

securities is that its marketing skills. It attracts the customers by its ad and then it

provides him a full kit of 3 in 1 a/c which is more beneficial or easy for an

investor to make trading.

 

HDFC SECURITIES

The HDFC Bank started its functioning as a depository participant in the year of

1993 with the name of HDFC Securities. It has gained the benefit of association

of bank which provides it many services like online money transfer and free

saving a/c, etc.It deals in shares, commodity, and mutual fund, insurance and

54

loans all major fields. The investor can get with these facilities online trading and

dial and trade facility. It is a major player in the security market as well as in the

banking sector also. It provides the investors saving a/c also which helps him to

transfer the money online in a/c. This is the main strength of the company. It has

increased very fast in the industry and now and then it is growing and growing.

The target of the company is to capture all its clients of its bank. The main focus

of the company is to provide a full package of benefits to the customers so that

they don’t have to go anywhere else.

    

KARVY SECURITIES

Karvy stock broking depository participant is a famous and big player in the

security market. It has incorporated in the year of 1975. Since then it is growing

very fast and became the 1st depository participant in Andhra Pradesh in January,

55

1998. The total branches in India of Karvy are 558 in more than 390 cities. It also

provides services of mutual fund and loans with commodity and share trading.

Karvy also helps in making the PAN card which is the main necessity of having a

demat a/c. Karvy has the client base services which helps the company to retain

its clients. The company gives more and more benefits to the customers for

making its area wide and overall accepted. In the south side it has a very good

name and fame. Now it is increasing its area in the whole country but till now it is

a leader of security market in south.

COMPARISON OF DEPOSITORY PARTICIPANTS

The comparison of different companies is not so easy but I have covered it up to

some extent by taking into consideration various crucial factors. I have compared

56

the depository participants on the 2 basis which are company based and client

based of various companies. It includes that what a company provides to the

clients at what charges and what the clients demand.

CHARGES OF THE COMPANIES

Brokerage Trading a/c Charges D-mat a/c charges

Intraday Delivery 1st year Afterwards Equity Commodity

Sharekhan 0.10 0.50 0 300 750 200

Indiabulls 0.10 0.70 0 0 1000 750

Karvy 0.05 0.50 100 0 0 0

HDFC Sec. 0.05 0.15 799 0 500 500ICICI

Direct.com 0.10 0.75 0 500 750 5005 Paisa. com

0.05 0.50 0 240 555 555

BROKERAGE CHARGES

57

00.10.20.30.40.50.60.70.8

BrokerageIntraday

BrokerageDelivery

The main factor which influences the decision of investor’s is brokerage. ICICI

direct. Com is charging the highest brokerage for Intraday and Delivery.

The lowest brokerage is charged by the HDFC Securities.

TRADING A/C CHARGES

58

0200400600800

1000

Afterwards

1st year

The charges for the opening of the trading a/c are also an important factor.

Indiabulls charges no money for taking a demat a/c. it is free of cost for the whole

life.

The highest charges are made by the HDFC Securities for operating a demat a/c.

D-MAT A/C CHARGES

59

0

200

400

600

800

1000

1200

Equity Commodity

There are the charges for opening the demat a/c also. Although this is not very

high, it plays a very important role. Yet at this time government has not allowed

Karvy to open a demat a/c for some security reason.

The highest charges for this are charged by Indiabulls and the lowest are charged

by Sharekhan in Commodity and by HDFC in equities.

CUSTOMER’S PRECEPTION

60

To make any comparison it is not right to see only one side of the coin. So to

make the comparison between the various companies I have tried to see the

perception and demands of the customers also. Now a day the whole power is in

the hand of customers to accept or reject a proposal so it is very necessary to

analyze them indifferently.

The various bases have been chosen for the differentiation. These are as under:

AWARENESS

61

A w a r e n e s s

5 0

3 7

4 7

2 1

4 3

1 5

4 4

0

1 0

2 0

3 0

4 0

5 0

6 0

s h a r e m a r k e t s e n s e x / n i f t y d e m a t

e q u i t y / d e r i va t i ve b r o k i n g h o u s e d e p o s i t o r y

S E B I

The awareness among the customers is high but not perfect. The survey made on

the 50 customers and everybody was having the basic knowledge about the share

market.

There was a lack of knowledge among the customers in the area of depository like

NSDL and CDSL up to some extent.

FREQUENCY OF TRADE

62

F r e q u e n c y o f T r a d e

d a i l y , 2 7w e e k l y , 8

m o n t h l y , 1 2IP O , 3 d a i l y

w e e k l y

m o n t h l y

IP O

The frequency of the trading in share market is very important for making any

comparison. If we don’t care of it, it will provide us false results.

There are mostly people who are interested in the intraday trading. The 2 nd

number is of monthly basis or long term investors. There are very few who apply

for IPO’s only or want to make trading in weeks

OPINION ABOUT CURRENT SCENARIO

63

0

1 0

2 0

3 0

4 0

5 0

O p in io n a b o u t C u r r e n t S c e n a r io

r i s k y

c o m l l e x

vo l a t i l e

e x p e n s i ve

fa vo u r a b l e

The share market is a market about which nothing can be guessed so it is very

important for the companies to see that what is the thinking of the customers

about the market scenario.

In the survey of 50 customers it was discovered that people think that the market

is more volatile than other periods of last 1 or 2 years. They are feeling that it can

give more benefits to them if the investment is done consciously.

Very few people say that the market is risky and they do not want to invest

because of afraid of loss.

BASIS OF INVESTMENT

64

Basis of investment is the criteria on which clients invest in the particular

company. There are various options with the clients for this and it depends on him

that what criteria he/she uses.

In the survey I got that mostly people invest on the basis of research mails. Of

course they utilize their own sense also, but the criterion of try & error is not

much favorable among the clients.

PREFERENCE OF INVESTMENT

65

P r e fe r e n c e o f In v e s tm e n t

5 8 %

2 2 %

3 %

1 0 %

7 %

e q u i ty

d e r i v a t i v e

P M S

m u tu a l fu n d

c o m m o d i ty

Preference of investment means that in which field investors want to invest their

money. It is very important for a company to study the behaviour and needs of an

investor.

In the survey I got that mostly people want to invest in equities by one or another

reason. The investment in PMS is very low because in it they have to invest a big

money and their money is invested by the company itself.

VOLUME OF TRADE/ MONTH

66

V o l u m e o f t r a d e / m o n t h

4 2 %

3 0 %

1 6 %1 2 % b e l o w 1 l a k h

1 l a k h - 5 l a k h

5 l a k h - 1 0 l a k h

m o r e t h a n 1 0 l a k h

It means the total of the trade made by the individual on an average per month.

This tells the level of investor that how much he/she can invest and the interest in

the market.

The number of investors is high for those who invest between the range of zero to

1 lakh. The number of investors is very few who have invested in the market more

than 10 lakh per month.

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FINDINGS

68

Based on the real data collected by primary and secondary sources and the

information, we can get the following findings:

1. The broking charges are charged maximum by the ICICI Direct. Com and

the minimum are charged by HDFC Securities.

2. Annual charges for the trading a/c are highest in HDFC Sec. and

Indiabulls charges no money for it.

3. D-Mat a/c charges are highest in Indiabulls and the lowest in the

Sharekhan Securities.

4. Awareness about the basic share market is very high among the customers

and for the Depositories it is very less.

5. Frequency of trade made by the customers is very high on intraday basis

and it is very low for IPO’s applications only.

6. The opinion about the current scenario of the market is volatile more than

previous years and very few people think that it is risky to invest at this

time.

7. Mostly investment is made on the basis of research mails provided by the

relationship managers and there are very few who want to play try and

error.

8. Customers 1st preference of investment is in the equity and the least

preference is PMS.

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9. Volume of investors who trade less than 1 lakh per month is very high and

it is very low for the investment more than 10 lakh on an average per

month.

RECOMMENDATIONS

70

1. The brokerage charges are the main income for any depository participant

and it is almost same for the companies except one or two. These one or

two companies are also not providing other same type of good and

beneficiary services to customers so Sharekhan Securities should not

change its brokerage charges to capture the market. The reason for this is

that one side it will reduce the income and the other side it will not

increase the customers in a large extent.

2. Annual charges play a key role for the customers and they consider it very

seriously so the company should reduce its charges from 300 rupees. This

type of charges not plays a significant role in the overall income of the

company.

3. D-Mat a/c opening charges are also a key point for the investors so it

should be reduced up to zero so that new customers can be attracted,

4. The trading made by the customers is mostly on the intraday basis so it

will generate the more and more brokerage. Along the other facility

company should provide more exposure to lure the trading more and more.

5. The current scenario is a very good time to catch the customers because

they think more volatility but less risk in the market. So it is very easy to

get new clients as well as more trading in the current time. So it is very

necessary for an organization not to think that current scenario is not good

for investors and traders. It will bring a good and surely result.

71

6. Investment is based mostly on the research mails provided by R.M.’s so

provide timely information more and more to get new and increased

investment. The relationship managers can play a crucial role in it so

appoint them more and provide them more facilities but on commission

basis. It will increase their potential.

7. Provide information about commodity and derivatives also, it will increase

their investment and tap the customers between the range of 1-10 lakh

investment per month. This is the range which can be motivated to invest

in the bulk. But this is possible only after providing the timely

information. People doesn’t care for money spending after the profit, they

consider only the information which leads to profit so provide them exact

possible information.

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BIBLIOGRAPHY

73

Books:

1. Kothari, C.R., “Research Methodology”, New Age International

Publishers, 2nd Edition.

2. Zikmund William G. (2004), “Business Research Methods,” Thomson

Asia Pvt. Ltd., Singapore.

Newspapers & Magazines:

1. Economics Times

2. Dalal Street

Websites:

1. www.sharekhan.com

2. www.nsdl.com

3. www.bseindia.com

4. www.nseindia.com

5. www.icicidirect.com

6. www.karvy.com

7. www.hdfcsec.com

8. www.indiabulls.com

9. www.5paise.com

74

10. www.google.com

QUESTIONNAIRE 1 (company)

Company Name: Location:

Year of Incorporation:

Trading provided by the company:

NSE BSE

Total branches in India -------

Total number of locations -------

Dealing in:

Share broking Insurance Commodities

Mutual Fund Loans

D-mat a/c opening charges:

Equity ------- Derivative -------

Trading a/c charges:

1st year ------- Afterwards -------

Brokerage charges: Equity Intraday ----- Delivery -----

Commodity Intraday ----- Delivery -----

Since when your branch is operating -------

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Volume of clients of your branch -------

Volume of investment made by investors/day -------Services provided by the company: Online broking Online fund transfer Dial & trade

Online terminal Research mail Online IPO

Exposure money provided:

4 times 6 times 8 and more times

Saving a/c provided by the company:

Yes No

Suggestions (if any) --------------------------------------------------------

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QUESTIONNAIRE 2 (customers)

Are you aware about the terms:

Share market Sensex/nifty

Dematerialization Equity/derivative

Broking house Depository participant

SEBI

How frequently you trade in share market:

Daily Weekly Monthly Only IPO

Name of broking house -------

Brokerage charges:Equity

Intraday ------- delivery -------

Commodity Intraday ------- delivery -------

D-mat a/c charges -------

Trading a/c charges: 1st year ------- Afterwards -------

Investment made in mostly: Intraday Delivery

Opinion about current scenario of the market:

Risky Expensive Complex

77

Highly volatile Suitable for investment

Basis of investment:

Research Mail Market Opinion Friend’s advice

Personal Analyze Try & Error

Preference of investment field:

Equity Derivative PMS

Mutual Fund Commodity

Volume of trade on an average/month -------

What is your other preference for investment -------

Satisfied with company:

Yes No

What services you want to avail:(Please give rank)1. -----------2. -----------3. -----------

Name: Age:

Income: Occupation:

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79